[Ip-health] U.S. Exports to and Investment in India Would be Significantly Higher Without Barriers, Says USITC

Claire Cassedy claire.cassedy at keionline.org
Mon Dec 22 13:17:47 PST 2014


U.S. Exports to and Investment in India Would be Significantly Higher
Without Barriers, Says USITC

December 22, 2014
Inv. No. 332-543
Contact: Peg O'Laughlin, John Greer, 202-205-1819

U.S. exports to and investment in India would be significantly higher if
not for Indian policy barriers, according to the U.S. International Trade
Commission (USITC) in its report Trade, Investment, and Industrial Policies
in India: Effects on the U.S. Economy.

The USITC, an independent, nonpartisan, factfinding federal agency,
prepared the report at the request  of the House Committee on Ways and
Means and the Senate Committee on Finance.

As requested, the report provides information on the effects of a wide
range of Indian policies that limit U.S. exports to and investment in
India.  These policy measures include tariffs and customs procedures,
foreign direct investment restrictions, local-content requirements,
treatment of intellectual property, taxes and financial regulations,
regulatory uncertainty, and other nontariff measures, such as unclear legal
liability, price controls, and sanitary and phytosanitary standards.

The report features the results of a USITC survey of U.S. firms in selected
industries that are currently doing business in India, a quantitative
analysis (using economic modeling) of the effects of Indian policy measures
on U.S. workers and the U.S. economy, and qualitative research into these
effects.  It also includes case studies and examples illustrating ways that
the policies affect particular companies or industries.  Highlights follow.

-The share of U.S. companies substantially adversely affected by
restrictive Indian policies rose from 18.8 percent to 26.1 percent between
2007 and 2013.  Shares for individual sectors in 2013 ranged from 7.7
percent to 44.1 percent.
-Over 60 percent of the affected companies have made strategic changes in
response to these barriers, most often directing fewer resources to the
Indian market.
-Policies in two areas – tariffs and customs procedures, and taxes and
financial regulations – have the heaviest effects on U.S. companies.  Other
issues, including investment and intellectual property policies, have large
negative effects on specific industries.
-If tariff and investment restrictions were fully eliminated and standards
of IP protection were made comparable to U.S. and Western European levels,
Commission model results indicate that U.S. exports to India would rise by
two-thirds, and U.S. investment in India would roughly double.
-Seven case studies highlight the effects of particular policies on
selected U.S. companies or industries.  They describe:
--the effects of certain duties on the wine and spirits industry;
--the effects of recent patent decisions on the pharmaceutical industry;
--the need to find new strategies to combat piracy in the content and media
--barriers to expanding local manufacturing in information and
communication technology,  which ---increase the costs for U.S. companies
to access the Indian government procurement market;
changes in business practices in response to restrictions on e-commerce;
--recent policies that have constrained U.S. exports of certain medical
--and deterioration in the policy environment governing clinical research
trials, which  has led to a decline in clinical research activity in India.

Trade, Investment, and Industrial Policies in India: Effects on the U.S.
Economy (Investigation No. 332-543, USITC Publication 4501, December 2014)
is available on the USITC's Internet site at

USITC general factfinding investigations cover matters related to tariffs
or trade and are generally conducted at the request of the U.S. Trade
Representative, the House Committee on Ways and Means, or the Senate
Committee on Finance. The resulting reports convey the USITC's objective
findings and independent analyses on the subject investigated. The USITC
makes no recommendations on policy or other matters in its general
factfinding reports. Upon completion of each investigation, the USITC
submits its findings and analyses to the requester. General factfinding
reports are subsequently released to the public, unless they are classified
by the requester for national security reasons.

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